Cambridge, one focus of much of the UK’s life sciences activity, has seen a sharp increase in office and laboratory market requirements in the last six months. With over 250,000 sq ft (23,225 sq m) under offer at the end of June, laboratory availability is expected to remain around its historic low, while the upswing in grade A office supply will be short-lived according to research by local property consultant Bidwells.
Rents for prime offices have increased by 37% over the past five years and Bidwells said the “extreme imbalance” in the market has driven both laboratory and office rents to new highs. Prime grade A rents are expected to hit £50 per sq ft (£538 per sq m) by the end of the year in the city centre. Laboratory rents will not be far behind, the firm states.
Meanwhile, supply of laboratory space continues to tighten with availability at 2.8%, the lowest level in seven years. At the end of H1 2021, there was a total of 82,000 sq ft (7,618 sq m) of space on the market but most of that under offer at the end of June.
Demand hits highest level since 2015
Office and laboratory demand is at its highest level since 2015, with new large requirements coming to the market. Total demand at the end of H1 was 1.7 million sq ft which, up 30% since the end of 2020 and 45% ahead of levels seen in mid-2020. Many new entrants are looking for areas in excess of 50,000 sq ft, Bidwells said. The development of the second phase of Cambridge Biomedical Campus, a 103,000 sq ft laboratory building that now has detailed planning consent, should help to meet laboratory demand.